Understanding Inventory System

The inventory system is an arrangement of goods related to logistics activities. Company can function the inventory in accordance with its objectives; some are stored and sold immediately, some are stored as raw materials. This intention will also determine the type of inventory system used by the company.

As businessmen, it’s necessary to understand the importance of an inventory system, so the companies can meet customer demands and make profits.

Types of Inventory Systems

1. Finished goods: final products that are ready to sell. 
2. Raw materials: items that will be used to produce finished products.
3. Work in process: goods that have not been processed fully or still require an advanced stage. In some cases, it can be in the form of a finished product but has not yet entered the quality control or assembly stage.
4. MRO (Maintenance, Repair, and Operating) goods: are used to maintain and repair equipment/machinery in the production process.
5. Safety stock: buffer products to anticipate high market demand.

The Benefits of Inventory Systems 

Avoiding Material Shortage 

Lack of materials is one of the causes of a company’s losses. Opportunities to make profits through product sales are hampered because the products are unavailable. The inventory system is the answer to providing backup products when there is an increase in demand.

Read More: 5 Tips for Stock Management for Your Business!

Controlling Inventory

The warehouse inventory system has been designed to control inventory with an organized inbound and outbound process. The distribution activities from one location to another can be arranged based on the flexibility of each order.

Advotics Warehouse Management System  allows stock mobility transparency in the warehouse. Warehouse staff can also maximize performance because stock movements can be recorded more accurately. By using barcode/QR code technology, all goods can be recorded automatically. Monitor products movements (fast-moving & slow moving categories) and reduce the chance of dead stock in the warehouse, which will cause losses for the company.

Increase Product Reputation & Company Profit

Key things to improve a product’s image in the distribution process are quality and availability, as well as the speed of delivery. Warehouses that implement a structured and transparent system can manage the inbound and outbound processes more smoothly. This system could be set to consider the goods’ expiration date or storing time, so the products can reach consumers in good quality. 

Product quality certainly has a direct impact on customer satisfaction and the brand. Those aspects will automatically improve the marketing chart. Schedule a demo for a more transparent warehouse system.

Still unsure about optimizing the inventory system? Optimal functions are beneficial to the business, saving resources in terms of manpower, funds, and work time more effectively and efficiently. Haven’t found the right inventory system yet? Find out more about Warehouse Management System Advotics.